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Rural areas affected by bank closures

Categories : Cash covers a broad range of transactions, Cash is universal
June 9, 2017
Tags : ATM, Branches, Innovation, US
Bank branch closures in rural areas have a negative effect on local businesses who find it hard to get access to loans or make their daily deposits. Banks that close branches should at least invest in modern ATMs that provide some essential banking services to their rural customers.
Communication Team / Equipo de Comunicación

In the US, an increasing number of rural communities are left without banking services as banks are closing local branches to save costs. Data from the Federal Deposit Insurance Corporation (FDIC) demonstrates that 472 branches were shut down over the past few years in North Carolina, leaving entire regions without physical access to banks. Furthermore, a study carried out by Reinvestment Partners shows that about 15% of US branches left rural areas since 2009.

The closure of local branches has a significant impact on a region’s growth. Indeed, small communities are left without access to bank loans and are thus not able to develop businesses or attract new companies. This situation contributes to increase the gap between rural and urban areas and puts pressure on towns that are often already struggling.

Furthermore, business owners attest that they have to face new challenges and are for example not able to make deposits on a daily basis as they need to move to the next city to access such services.

Jim Hansen – PNC bank regional president – recognizes the crucial role local branches play for rural communities but also stated that banks need to adapt to the digital shift and reallocate funds to online developments. However, banks should at least provide rural regions with modern ATMs enabling consumers to access standard banking services. 

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